FDA Maps Strategy to Counter Supply-Chain Threats

Food and Drug Administration officials acknowledge that its established system for ensuring the quality of medical products marketed in the United States cannot cope with the soaring volume of pharmaceuticals and active ingredients coming into the country from all over the world. Because of the potential for consumer harm from intentional adulteration, fraud, and counterfeiting, these developments require major changes in the way FDA does business. Instead of sending inspectors abroad to scrutinize foreign facilities or trying to examine more products at US borders than before, agency officials seek to collaborate more with other regulatory authorities, to make greater use of third-party auditors, and to establish global-information networks that can better alert officials to potential safety hazards.

The call for a new approach to food and drug regulation will have a notable impact on FDA field inspections and compliance operations. The Office of Compliance (OC) in FDA's Center for Drug Evaluation and Research (CDER) has reorganized to heighten its focus on supply chain and international issues. At the same time, manufacturers are supporting new approaches and collaborative efforts to prevent drug theft, diversion, and distribution of counterfeit products around the world. These changes also reflect FDA's need to cope with increasingly tight resources at government agencies and healthcare organizations. FDA faces a potential $250-million reduction in its budget for fiscal year 2012, which begins Oct. 1, 2011, as Congress moves to cut funding for most federal programs. Such a cut would severely limit funds for FDA field inspections in all regions and limit the increased oversight of food producers and imports that has been mandated by new food-safety legislation.

GLOBAL CHALLENGES

The lines between domestic and foreign production are increasingly blurred. The difficulties of ensuring the safety and quality of imported food and medical products in such a world are outlined in the report, "Pathway to Global Product Safety and Quality," which FDA Commissioner Margaret Hamburg unveiled in June 2011. Although the report contains few really new proposals for overseeing food and drug imports and outsourced production, the document is noteworthy for providing a comprehensive overview of the forces reshaping biopharmaceutical product development.

In the face of pressure to cut costs and increase productivity, pharmaceutical companies are shifting manufacturing to foreign locations and searching for less expensive ingredients. The cost of formulating an active pharmaceutical ingredient (API) is 15% to 40% less expensive in India, than in the US. Consequently, drug manufacturers now import 80% of APIs, primarily from China and India. Imports of pharmaceutical products have increased about 13% per year for the past seven years. This shift is boosting the US trade deficit in pharmaceutical products, which has jumped from less than $2 billion in 2000 to $18 billion in 2008.

Additional overseas outsourcing, however, fragments the drug-production process. Contract manufacturing has more than doubled during the past decade to an estimated $46 billion business in 2010. China and India now have the largest number of foreign, FDA-registered drug manufacturing establishments. These and other emerging nations also are producing more complex, high-risk biologics, and vaccines and are becoming more prominent in biopharmaceutical research and development (R&D). India and China already have more than 30% of the world's drug master files, and more clinical trials are taking place in these regions. With a growing volume of foreign manufacturers and producers to monitor, FDA concedes that it is not viable to scale up its current regulatory model, even if it had the resources to do so.

These developments inevitably open the door to more economically-motivated abuse, drug counterfeiting, fraud, and intentional adulteration. For many novice suppliers, the "temptation of economic gain is greater than any concern for risk to human and animal health," the FDA report observes. It has become "difficult to identify the 'source' of a product and to ensure that all players along the supply chain meet with safety and quality responsibilities." The US already has suffered the consequences of adulterated heparin and counterfeit glucose-monitoring strips, and low-quality counterfeit medicines are widely available, particularly in developing countries. Americans feed illegal operators, moreover, by purchasing more pharmaceuticals online, often from unknown sources and without appropriate oversight and safeguards.